Following a USD 220 billion money-laundering scandal involving Danske Bank, Estonia has cancelled 500 cryptocurrency companies’ licenses, as part of a crackdown on illicit financial flows.

The Estonian Financial Intelligence Unit (FIU) head indicated that the clampdown was not to cripple the sector, but rather tighten regulations to prevent risks associated with money laundering. To date, the FIU has shut down companies that failed to start operations in the Baltic state within six months of getting a license. Regulators are concerned that Bitcoin exchanges and other crypto companies might be liable to using their platforms to facilitate illegal transfers, Bloomberg reported.

The moves come after Danske Bank was accused of facilitating USD 223 billion of laundered money through a small Estonian branch. Until now, Estonia has been a haven for virtual currency companies. According to Bitcoin news, the north-eastern European country was among the first on the continent to liberalise crypto in 2017, licensing more than 1,400 entities in a space of three years.

According to the new regulations, permits will now be issued after three months at a cost of EUR 3,300. Previously, it took 30 days to obtain the same license for EUR 300. Cryptocurrency outfits registered in Estonia will also need to incorporate in the country or open an Estonian branch of a foreign company.